innovation blind spots

Thirty years ago, I was a product manager for a startup company that created high-performance, multiprocessing minicomputers. Powerful, scalable, and based on open standards, they offered exceptional price/performance. In 1988, Electronics magazine gave its Computer of The Year award to the flagship model

As we introduced the system, we described the “ideal”
customer: a medium to large organization that used Unix-based systems, and ran
large database applications, especially Oracle applications. We trained the sales force, produced some
modest direct mail campaigns, and launched.

Then reality set in. In the first three months, we sold
about 45 machines to some 30 different organizations. We gathered data about
our new customers and looked for correlations that would help us target
prospective customers more precisely. We found nothing — no patterns in terms
of size, SIC code, geography, application, and so on. The data were almost
random.

We were stumped. So, we decided to interview the key
decision maker in each account. We created an interview guide and fanned out to
visit customers

After our visits, we dug into our findings. Again, we found
no useful patterns in the demographic data. Then we started describing the key
decision makers. Who were they? Why did they decide on us?

Most of the decision makers were men in their early thirties
who had recently been promoted to a position typically described as VP, Data Processing. They replaced an older person who had held
the same position for more than ten years. One of our marketers had a flash of
insight: “It’s almost like the decision maker is saying, ‘I’m the new sheriff
in town. We’re going to do things my way. This is one of my first big decisions
… and we’re going to buy a hot new machine from a startup company. I’m going to
make my mark.’”

It turned out to be a very accurate description. Nominally,
our customers were buying our machines to run large applications. But psychology
was perhaps more important. We estimated that roughly 60% of our customers fit
the “new sheriff” profile.

We decided to market specifically to new sheriffs. We
trawled through organization profiles and identified those that had a new VP of
Data Processing. We sent each new sheriff a fairly intense mail campaign
coupled with calls by our local sales rep. The campaign succeeded rather well.
From the time of the launch, we grew to $300 million in revenue in about two
years.

I didn’t know it at the time, but we were practicing an art that today is called, the “jobs to be done theory of innovation.” (Click here for a good introduction). Developed by Clayton Christensen and his colleagues, the basic idea is that demographic information doesn’t reveal why a person chooses to purchase a new product or service. If we misunderstand the job to be done, our innovations will miss the mark.

Our startup company, for instance, positioned around big
machines for big databases. We wanted to offer ever bigger, pricier machines. The
new sheriff profile, however, changed our thinking. To get in the door, we
needed to make it easy for the new sheriff to buy something on his own
authority. So, we introduced an entry-level machine priced just below a typical
VP signature limit.

Similarly, think about why men buy pajamas. We might think they
simply want to stay warm. But men in America typically don’t buy pajamas until they
have a daughter who is three years old. Their motivation is not to stay warm
but to preserve their modesty. If we misunderstand that, we’ll produce far too
many cozy, warm, flannel pajamas that men will never buy.

In my experience, good marketers and salespeople use the jobs-to-be-done method naturally and intuitively. They’re good observers and naturally ask a basic question: why do people buy these products? They dig into the data but, more importantly, they observe how people behave and ask insightful questions. The management guru, Ted Levitt,was a natural at this. He noted that people don’t buy gasoline for their cars. Rather, they buy the right to continue driving.

The jobs-to-be-done theory suggests that the key to innovation
is sociology, not technology. Do you want your company to be more innovative? It’s
time to add more marketers and salespeople – and maybe a sociologist and anthropologist
– to your development team.

Do you want to be more innovative? A good first step is to discover your blind spots. If you can’t see something, you can’t make it better. But, how do you know if you’re not seeing something? After all, your blind spots are blind. It’s not so hard if you follow the tips in this week’s video — you’ll discover how to identify your blind spots and see the world more fully. You’ll also discover why a diverse organization is essential. Building a diverse organization is not just the right thing to do. It will also stimulate new innovation. Now watch the video: